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1 1 (January 22, 2020)

handle is hein.crs/govbgzu0001 and id is 1 raw text is: F. January 22, 2020 The Legal Framework of the Federal Power Act The Federal Power Act (FPA or the Act) (16 U.S.C. §§ 791 et seq.) is the primary federal statute governing the wholesale transmission and sale of electric power, as well as the regulation of hydroelectric power. The Act is divided into a few discrete Parts. Part 1 (16 U.S.C. §§ 791-823d), initially enacted in 1920 as the Federal Water Power Act, created the Federal Power Commission (FPC) and gave the new agency the authority to regulate the construction, operation, and maintenance of nonfederal hydroelectric power generation. Part 11 (16 U.S.C. §§ 824-824w) authorized the FPC to regulate the interstate transmission and wholesale sale of electricity. Congress transferred the authorities and responsibilities of the FPC under FPA Parts I and II from the FPC to the Federal Energy Regulatory Commission (FERC or the commission) pursuant to the Department of Energy Organization Act of 1977 (91 Stat. 565; 42 U.S.C. § 7101 note). Part III (16 U.S.C. §§ 825- 825u) established a set of rules and procedures governing recordkeeping and proceedings before the FPC and its successor, FERC. The Act also includes Part IV (16 U.S.C. §§ 828-828(c)), which carved out exemptions from certain requirements in the Act in order to facilitate the development and construction by States and municipalities of water conservation facilities. This In Focus provides an overview of the FPA, focusing largely on the first two Parts of the FPA. These Parts establish the framework for FERC regulation of two different energy industries: hydroelectric power generation, and wholesale electric energy sale/purchase and transmission. F-IFA rt~ 1, yrpwe cnsn FERC licenses the construction and operation of nonfederal hydropower projects under Part I of the FPA. Nonfederal hydropower refers to any hydropower project not owned by the federal government, regardless of location. Section 4(e) (16 U.S.C. § 797(e)) authorizes FERC to issue hydropower licenses, and sets forth some basic parameters for the application and review process, including a requirement that the Chief of Engineers and the Secretary of the Army approve plans for any hydropower project affecting the navigable capacity of any navigable waters of the United States prior to issuance of the license. Section 4(e) also provides that when deciding on a license, the commission should not only consider the power and development purposes for which licenses are issued, but also give equal consideration to the purposes of energy conservation, the protection, mitigation of damage to, and enhancement of, fish and wildlife ..., the protection of recreational opportunities, and other aspects of environmental quality. FPA Section 10 establishes several conditions applicable to all hydropower licenses issued pursuant to the FPA. Notably, Section 10(a) (16 U.S.C. § 803) requires FERC to give equal consideration to purposes other than power generation, including the environmental and recreational concerns listed in Section 4(e). Section 10 also requires licensees to refrain from substantial alterations to their facilities without approval from FERC, maintain and repair the facilities as necessary, pay certain fees and charges to the United States and to other hydropower licensees from whom they derive a benefit, and adhere to other conditions FERC deems appropriate, including those intended to protect fish and wildlife. FPA Section 18 (16 U.S.C. § 811) specifically addresses a hydropower licensee's obligation to construct, maintain, and operate such lights and signals as may be required by the Secretary of the Department in which the Coast Guard is operating and such fishways as may be prescribed by the Secretary of the Interior or the Secretary of Commerce, as appropriate. While Section 10 references such obligations among others, Section 18 establishes them with specificity, and obliges the licensee to provide them at its own expense. FERC incorporates these requirements in licenses or reserves the right to mandate them as prescribed by the Department of the Interior at a later date. FPA Section 31(a) (16 U.S.C. § 823b) details FERC's investigation and enforcement authority over hydropower facilities. The agency is empowered to investigate and monitor hydropower facilities for compliance with license terms and conditions. FERC's jurisdiction over the electric power industry as set forth in Part II of the FPA is limited. Pursuant to Section 201, Part II applies only to the transmission of electric energy in interstate commerce and to the sale of electric energy at wholesale in interstate commerce. (16 U.S.C. § 824(b)). The FPA defines wholesale as sale for resale. (16 U.S.C. § 824(d). Intrastate transmission and distribution of electricity, as well as intrastate and/or retail sales of electricity, are largely regulated by state agencies. kJrnder P1>A 20czor md2L 206 FERC derives much of its authority over the electric power industry from FPA Sections 205 and 206. Section 205 (16 rq\\ - , gn'a', ggmm 'M M X 11LULANJILiM,

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